Duetto, the leading provider of revenue and profit software and Cloudbeds, a unified platform driving hotel growth, have partnered to release their first-ever Hotel Market Pulse report. This comprehensive report offers valuable insights into global hotel performance and profitability by analyzing data from both companies. With this inaugural release, Duetto and Cloudbeds aim to help hoteliers optimize their operations and maximize revenue by tapping into data-driven strategies that reflect evolving traveler behavior.

Shifting Trends in Traveler Booking Behavior

The Hotel Market Pulse report, based on performance data from January 1 to July 31, 2025, compared to the same period in 2024, reveals significant shifts in traveler booking behavior. OTAs (Online Travel Agencies) continue to dominate as the leading demand channel for hotel bookings. However, the landscape has evolved, with Expedia leading the charge, experiencing nearly a 12% increase in room night volume year-over-year. Other OTAs, such as Trip.com, Hotelbeds and Despegar, have also seen more than a 35% increase in volume.

These changes in booking patterns came at the expense of other major OTAs, including Booking.com, Agoda and Vrbo, which experienced slower growth. For hoteliers, understanding these shifts is crucial in optimizing distribution strategies and ensuring greater visibility across the most profitable platforms.

Softening Pricing Power and the Impact on Profit Margins

The report also highlights a softening in pricing power, which has led to performance falling short of expectations for many hotel operators. While the average daily rate (ADR) increased modestly on platforms like Booking.com and Expedia, other OTAs experienced a decline. For instance, Vrbo’s ADR dropped by 10%, Hotelbeds saw a 5% decline and Airbnb’s ADR decreased by 2%.

When adjusted for inflation, the “real ADR” for many properties showed a decline, underscoring the growing challenge of maintaining profitability in a market where traveler price sensitivity is on the rise. For hoteliers, these trends necessitate a more strategic approach to pricing and distribution in order to maximize revenue per room, even in the face of softening demand.

The Rise of Shorter Stays and Microcations

Another key trend identified in the report is the consistent decline in the Average Length of Stay (ALOS) from January to July 2025. Compared to the same period in 2024, there has been a notable shift toward shorter stays, likely due to tighter travel budgets and the growing popularity of microcations. Travelers are opting for shorter, more frequent trips, which may be influencing hotel booking patterns across the globe.

For hoteliers, adapting to this trend means offering flexible booking options, targeted marketing for shorter stays and focusing on enhancing the overall guest experience for travelers seeking quick getaways. Capitalizing on the microcation trend could be key to boosting occupancy rates during traditionally slower periods.

Positive Growth in Hotel Profitability

Despite the challenges in pricing, hotel profitability has shown improvement. Total Revenue per Available Room (TRevPAR) rose globally, with Latin America leading the charge with a 4.6% increase. North America followed closely behind with a 3.5% growth and Europe saw a modest 2.5% increase. Hoteliers in all regions saw food and beverage (F&B) revenue as a key driver of ancillary income, reinforcing the importance of non-room revenue streams in bolstering hotel profits.

Additionally, Gross Operating Profit Per Available Room (GOPPAR) showed an upward trend across all regions. North America led the way with a 2.9% increase in GOPPAR, followed by Latin America with a 1.3% growth and Europe at 1.2%. These gains reflect the effectiveness of optimizing operational strategies to maintain profitability amid shifting market conditions.

Rising Labor Costs: A Persistent Challenge for Hoteliers

One of the most significant pressures on hotel profitability continues to be rising labor costs. The report reveals that labor expenses remain the largest single cost for hotels. In North America, labor costs increased by 4.6%, reaching 47% of total operating expenses. Europe, on the other hand, saw labor costs rise by 3.9%, now comprising 60% of operating costs.

For hoteliers, managing labor costs without compromising guest service will be a key challenge moving forward. Leveraging technology and automation, along with careful staffing strategies, may help reduce operational expenses and maintain profitability despite increasing labor demands.

Duetto and Cloudbeds: Empowering Hoteliers with Data Insights

The collaboration between Duetto and Cloudbeds brings together the power of advanced technology and insightful data, enabling hoteliers to anticipate changes in traveler behavior and make smarter, more informed decisions. By integrating Duetto’s revenue management tools with Cloudbeds’ distribution insights, hoteliers can optimize their pricing, distribution and operational strategies.

Rafael Blanes, Chief Growth Officer at Cloudbeds, emphasized the importance of leveraging data to understand shifting traveler demand and make proactive decisions that unlock profitable growth. Jason Hofmann, Chief Customer Officer at Duetto, added that this partnership provides hoteliers with a comprehensive understanding of how traveler behavior is evolving and the best ways to respond.

The Hotel Market Pulse report is a powerful tool for hoteliers looking to navigate the complexities of the current market. By leveraging the data-driven insights provided by Duetto and Cloudbeds, hoteliers can not only optimize revenue but also ensure their operations remain agile and profitable in an ever-changing landscape.

Conclusion

Duetto and Cloudbeds’ Hotel Market Pulse report offers invaluable insights into the trends that are shaping the hotel industry. By understanding shifts in traveler behavior, pricing pressures and profitability trends, hoteliers can better equip themselves to adapt and thrive. With data-driven tools from Duetto and Cloudbeds, hotel leaders can unlock new opportunities for growth and ensure long-term success.

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